April 5, 2007

 

CBOT Corn Outlook on Thursday: Steady to 1 cent higher start seen

 

 

Chicago Board of Trade corn futures are forecast to begin trading steady to 1 cent higher Thursday, supported by continued concerns on possible planting delays due to the weather, a floor analyst said.

 

In overnight electronic trading, May corn ended unchanged at US$3.59 1/2 cent per bushel, July fell 1 1/4 cents to US$3.70 1/4 and December also finished unchanged at US$3.80 1/2. E-CBOT volume in May was 5,056 contracts.

 

Corn was steady overnight and could begin trading even with Wednesday's settlements, the analyst said. However, the continued cold weather in the U.S. Midwest with temperatures much below normal and forecasts expecting moisture to follow the cold, has the market concerned about planting delays which should support the market, he said.

 

Weekly corn export sales were lower than expected and should act as a drag on prices, though corn could see some spillover from wheat, a commission house trader said.

 

Wheat futures were stronger in overnight trade on concerns over the potential damage to the winter wheat crop due to the cold weather.

 

The U.S. Department of Agriculture reported weekly corn export sales were 660,400 metric tonnes for the week ended March 29, below the 800,000 to 1.0 million tonnes expected by analysts. Included in this total were sales of 110,800 tonnes for delivery in the 2007-08 marketing year.

 

In the western U.S. Midwest mainly dry and cold conditions are expected through Sunday with a chance for light precipitation developing in the west and north Monday, DTN Meteorologix Weather said. Temperatures are expected to average well below normal with the lowest temperatures possibly below 20 degrees Fahrenheit to the low 20s.

 

In the eastern sections of the region it will be mainly dry over the next several days with windy conditions expected over the next two days. Low temperatures are expected to range from below 20 degrees Fahrenheit to the low 20s, including areas in southeast Missouri and all of Ohio, Meteorologix Weather said.

 

On daily technical charts, May corn prices ended nearer the session high on short covering and bullish weather forecasts as the cold and wet weather will likely delay planting of corn, a technical analyst said. A solidly higher close on Thursday would be a technical sign that a near-term bottom has occurred in the market, the analyst said.

 

First resistance for May is seen at US$3.63 1/2, Wednesday's high and then at US$3.70. First support is seen at US$3.55 and then at US$3.51.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled modestly higher. The benchmark September contract gained RMB/4 to RMB1,673/tonne.

 

The CBOT agricultural futures markets will be closed Friday in observance of the Good Friday holiday.